Today the US Supreme Court ruled that any State into which sales of goods or services are made may collect a sales tax from the seller, even if that seller has no place of business or other contact within or with that State. This ruling upsets settled law and affects sales by on-line retailers, advertisers who run ads in papers and magazines, radio and TV offers. Although large retailers will need to comply, they have the ability to set up collection methods and to remit sales taxes to various jurisdictions. But what about the small seller? How do you remit State Sales Tax, County or Municipal Sales taxes? How do you keep track of all the requirements, file all the forms, remit in timely fashion? How do they handle audits, how do they defend against fines?
Note that in different jurisdictions different things are taxed, not just goods but services, digital products and software. Which ones at what rates?
Let’s think ahead. What is going to happen? Some/many vendors will just stop selling or stay in one or a few States. Many vendors will revert to national vendors to handle their goods — Amazon, Google, other giants now or hereafter existing. Perhaps a software solution, or an IT solution for smaller vendors, will present itself, serving as a center for filing, collection and payment. Can blockchain technology be merged with facilitated financial transfers on an automatic basis to instantaneously sort out the tax burden, report it and carve out and remit the taxes automatically, crediting the net-of-tax amount to the vendor?
On the other side of the coin, how will States enforce against the small or casual vendor on the other Coast? Or in China or Europe?
This decision is a stunning reversal of the taxation of interstate commerce; will the Federal Government pass legislation addressing this issue? Is it alterable by legislation or is this a Constitutional issue? We will need to study the decision which is, today, “hot off the press.”